City manager: Rochester is ‘certainly on the move’

Wednesday

Mar 26, 2014 at 3:15 AM

By Liz Markhlevskayalmark@fosters.com

ROCHESTER — With growing commercial tax base and a solid financial position, the city is “certainly on the move,” said City Manager Daniel Fitzpatrick during the State of the City breakfast forum at Frisbie Memorial Hospital.

According to Fitzpatrick, several factors point to the city’s strong financial situation, including a growing commercial tax base, favorable bond ratings, and the recently released annual audit.

The city’s total assessed valuation, which had been dropping annually between 2009 and 2012, is now recovering. The total valuation in the city stands at $2,021,637,412, compared to $2,004,617,304 last year and $1,988,975,970 in 2012.

“We’re out of the doldrums of 2008,” said Fitzpatrick, stating the city is no longer in a recession.

In his State of the City address in front of about 75 people Friday, Mayor T.J. Jean said, “The state of our city is remarkably strong.”

He said the schools are performing well, commercial development continues to rise, and the City Council continues to make infrastructure investments, which include paving projects for which the city pays in cash. He also said that public safety officials are doing a good job keeping the city secure and healthy.

Despite the good news, Jean said the city will have to deal with some challenges ahead, in the next fiscal year. One such challenge is personnel costs, which account for about 80 percent of the city’s budget. According to Jean, health insurance premiums are continuing to rise at an unsustainable rate, and the N.H. Retirement System is putting an additional burden on the city budget.

As the council prepares to review and adopt the budget for next fiscal year, Jean said there are not many places to make budget reductions.

“We are pretty much at a bare bones budget,” said Jean.

He said that as City Council prepares to negotiate with collective bargaining units, it will take working as a team to try to get health insurance costs under control.

“The dark cloud over our heads is ObamaCare,” said Jean.

He said city officials must do everything they can to avoid the “Cadillac tax,” or an excise tax, which goes into effect in 2018. The tax is part of the Affordable Care Act, also known as ObamaCare, and will be imposed on the value of health insurance benefits exceeding a certain threshold.

On the economic development front, Karen Pollard, the economic development manager for the city, also gave some good news.

According to Pollard, Rochester’s industrial and commercial tax base has grown by 58 percent in the past 10 years, and business uses now account for 26 percent of property tax valuation.

She said the city is aiming to be the most business friendly — and the most entrepreneurial — city in the region.

The recent expansion of the Granite State Business Park has allowed for construction of a new manufacturing center, the colocation of Albany Engineered Composites and Safran Aerospace Composites. The new plant, which is located in a TIF district, is expected to bring hundreds of new jobs into the city, and the hiring process has already begun.

“Safran is an aggressive hirer of talent,” said Pollard.

She said that through programs such as the Advanced Technology and Academic Center, which opened in Rochester last summer, the city is hoping to provide a great enough workforce to keep the new manufacturing plant growing.

Pollard did note that this year Rochester saw a reduction in the workforce and employment. She said Rochester seems to be attracting residents from outside of the city to come work in Rochester, while Rochester residents are not taking as many of the new jobs as city officials would like. She said she plans on studying the issue further, also noting the city is in need of workforce housing.

Plans for the Granite Ridge Development District, located on Route 11, are expected to gain Planning Board approval by the end of April, and trees in the area have already been cleared in preparation for a new 300,000-square-foot shopping center, which will be located just south of Walmart. The center will include a movie theater, restaurants, and retail shops, though the names of the future tenants have not yet been released. According to Pollard, only about 51,000 square feet of leasing space is still available.

According to Fitzpatrick, the city recently underwent a comprehensive financial review by Moody’s and Standard & Poor’s, and results were very favorable. Moody’s, which gave the city an A1 rating, and S&P, which gave it an AA- rating, commented on the city’s conservative financial management, diverse tax base, and healthy reserves, said Fitzpatrick.

“The city is certainly on the move,” he said.

Fitzpatrick said the annual audit, for the last fiscal year, found an unmodified opinion, meaning auditors found no issues in the city’s financial reports.

According to Fitzpatrick, city staff are also working to revamp the city’s website, to make the site more attractive and easier to navigate.